The Everything War summary

Whatever you do in your day-to-day life, there’s a good chance that Amazon is a part of it.

You might shop their online marketplace, where the convenience of low prices and quick delivery became even more essential during and after the COVID-19 pandemic. Perhaps you unwind with a good book on your Kindle, an audiobook from Audible, or one of the hundreds of movies and shows streaming on Amazon Prime. Maybe you have a device with Alexa’s voice assistance service built in. 

Even if you don’t realize it, Amazon is everywhere. Amazon Web Services, or AWS, is a heavyweight champion of cloud services, powering the digital backbone for giants such as Facebook, Johnson & Johnson, and Toyota. So, even if you're not using Amazon directly, its services likely underpin much of your digital life. 

So, how did we get from online bookstore to a company that seems to be everywhere? 

Amazon was founded in 1994 as an online book distributor working out of Jeff Bezos’s Bellevue, Washington garage. But this sort of grassroots story popular in the tech industry can be misleading. 

Before Amazon, Bezos attended Princeton University, studying and then working in the financial tech sector. The idea for Amazon came whilst he was working for D.E Shaw & Co, a hedge fund that was looking into a brand-new blossoming technology – the internet. 

Bezos’s job at Shaw was to evaluate if this so-called “World Wide Web” had any potential as a sales platform, and identify which markets would benefit from an online presence. By the time Bezos left Shaw, he had already identified books as the best product to experiment with online sales. They were easy to store and cheap to ship, plus, he could take advantage of a Washington law which meant interstate delivery was tax-free. 

But books were always meant to be just the beginning.  From the outset, Amazon was built on a strategy of prioritizing growth and reinvestment over profits. “Get Big Fast” was the companies early mantra. This relentless drive for growth lead Amazon to rapidly diversity its offerings, but left the company constantly tight on cash. 

When Amazon went public in 1997, it was still operating at a loss. This baffled traditional investors, who were accustomed to evaluating companies on long-term profitability. Yet, Amazon’s stocks were an immediate hit. Bezos was very vocal about his reinvestment strategy, ensuring that Amazon’s stock value continued to climb despite the reported losses. Without making any profits, Bezos was a Billionaire within the year. 

The re-investment rule meant that Amazon was free to spend its money on infrastructure, technology, and market research. Amazon launched AWS (Amazon Web Services) in 2006. As the first cloud computing platform, it offered businesses a wide range of services including computing power, storage, and databases, all without the need for physical infrastructure. This, along with its advertising branch, represents the majority of Amazon’s current revenue. 

But critics suggest that it was more than just good business sense and a commitment to reinvestment that has bought the tech giant to where it is today. Perhaps it’s time to look behind the curtain at what it really takes to sell everything.